November 20, 2021

Stocks and the peso fell as a result of the BSP rate decision and US economic news.

The latest Bangko Sentral ng Pilipinas (BSP) rate decision, combined with economic news from the United States, resulted in a negative close for both the main stock index and the peso on Friday.

The main index fell 0.26 percent, or 18.77 points, to 7,280.57.

The Dow Jones Industrial Average fell 1.41 percent, or 55.59 points, to 3,878.11 points.

The majority of the sectoral indexes finished the day in the red, with Mining and Oil down 2.84 percent, Financials and Holding Firms down 0.66 percent, and Industrial down 0.03 percent.

Property, on the other hand, increased by 0.35 percent, while Services increased by 0.08 percent.

Volume increased to 2.11 billion shares worth PHP22.07 billion.

Decliners outnumbered advancers 127 to 66, with 49 shares remaining unchanged.

“Philippine shares fell as investors digested the latest BSP statement, earnings reports from US retailers, and an update on the labor market,” said Luis Limlingan, head of sales at Regina Capital Development Corporation (RCDC).

Limlingan emphasized monetary authorities’ bid to maintain an accommodative policy stance to support the domestic economy’s recovery, citing statements by Bangko Sentral ng Pilipinas (BSP) officials on Thursday.

The BSP’s policy-making Monetary Board (MB) kept the central bank’s key rates steady on Thursday, noting that while domestic growth has continued to improve, it is still fragile.

In the United States, initial claims for unemployment insurance fell to 268,000 for the week ending November 13, down from 269,000 the previous week.

According to Limlingan, this is the lowest level since March of last year, and it is the seventh consecutive week of decline.

Michael Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC), attributed the PSEi’s negative weekly close to profit-taking.

He also mentioned investors’ concerns about an increase in coronavirus disease 2019 (Covid-19) infections in some European countries, global inflation, and new share sales and bond issuances in the local market until the end of the year.

“Some election-related leads may also have triggered the recent healthy profit-taking in the local stock market, PSEi, which is still hovering among 10-month highs and near pre-pandemic highs (since February 2020),” he said.

The PSEi’s next immediate support level, according to Ricafort, will be between 7,200 and 7,210.

Meanwhile, the peso fell to 50.41 pesos to the US dollar, down from 50.23 a day earlier.

It started the day at 50.27, down from 50.33 on Thursday.

It traded between 50.43 and 50.21, for a total of 50.332.

Volume was USD1.19 billion, down from USD1.27 billion the previous session.

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